Germany nd
pension | Pension reform of a different kind
The unions provide refreshing food for thought for the pension debate - and in the process get entangled in contradictions with the capital market.
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Yasmin Fahimi, Chairwoman of the German Trade Union Confederation (DGB), presents the pension commission's recommendations. Photo: dpa/Carsten Koall The pensions are not too expensive. People don't work too little. And they don't retire too early. With its results paper, the pension commission of the German Federation of Trade Unions (DGB) shows where the conflict actually lies in the heated debate. Namely in a question of distribution between capital and labor and less between generations.
The contribution rates are lower today than they were 36 years ago, the share of federal funds has fallen, as have the health insurance funds' expenditure as a percentage of GDP. The real problem with financing is that pensions did not grow in proportion to productivity development. Instead, corporate profits rose. Pension investments on the capital market certainly do not change that.
This injustice cannot be solved through private funds - after all, poorer employees often cannot afford them. The DGB therefore proposes a two-pillar model with statutory and mandatory company insurance. The second is intended to increase the supply level to 70 to 90 percent of the net wage.
However, the unions get entangled in contradictions with their ideas. While they strictly reject investments on the capital market when it comes to statutory insurance, they accept speculation when it comes to company insurance. This is how traditional company funds generate their returns. In addition, of course, some people are left out of the company funds.
A fair pension can work if the concept of work is thought more broadly and includes, for example, care work, everyone pays in and wages increase with productivity development. Who could possibly demand that?
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